CD6 is associated with T-cell modulation and is implicated in several autoimmune diseases. We previously demonstrated that Itolizumab, a CD6 domain 1 (CD6D1) specific humanized monoclonal antibody, inhibited the proliferation and cytokine production by T lymphocytes stimulated with anti-CD3 antibody or when co-stimulated with ALCAM. Aberrant IL-17 producing CD4+ helper T-cells (Th17) have been identified as pivotal for the pathogenesis of certain inflammatory autoimmune disorders, including psoriasis. Itolizumab has demonstrated efficacy in human diseases known to have an IL-17 driven pathogenesis. Here, in in vitro experiments we show that by day 3 of human PBMC activation using anti-CD3 and anti-CD28 co-stimulation in a Th17 polarizing milieu, 15-35% of CD4+ T-cells overexpress CD6 and there is an establishment of differentiated Th17 cells. Addition of Itolizumab reduces the activation and differentiation of T cells to Th17 cells and decreases production of IL-17. These effects are associated with the reduction of key transcription factors pSTAT3 and RORγT. Further, transcription analysis studies in these conditions indicate that Itolizumab suppressed T cell activation by primarily reducing cell cycle, DNA transcription and translation associated genes. To understand the mechanism of this inhibition, we evaluated the effect of this anti-human CD6D1 mAb on ALCAM-CD6 as well as TCR-mediated T cell activation. We show that Itolizumab but not its F(ab')2 fragment directly inhibits CD6 receptor hyper-phosphorylation and leads to subsequent decrease in associated ZAP70 kinase and docking protein SLP76. Since Itolizumab binds to CD6 expressed only on human and chimpanzee, we developed an antibody binding specifically to mouse CD6D1. This antibody successfully ameliorated the incidence of experimental autoimmune encephalitis in the mice model. These results position CD6 as a key molecule in sustaining the activation and differentiation of T cells and an important target for modulating autoimmune diseases.